Money My Way - Money and work
Whatever job you have, it can be tough to grasp the ins and outs of managing the money you have coming in. There's a lot to think about - understanding your payslip, checking your tax code, paying into a pension scheme - it can all be very confusing!
Task 1: A New Job
When you start a new job, there are a lot of things to think about. What information do you have to provide to your new employer? What information will your current employer (if you have one) need? If you're receiving out of work benefits, who do you have to tell about your new job?
Your new employer needs...
- Proof of your eligibility to work in the UK. This could be something like a passport, a national identity card, an application registration card or a residence permit
- Your National Insurance number, so that you can pay the right National Insurance contributions
- A P45 (tax form) to make sure you're paying the right amount of tax
- Your bank details, so they can pay you!
Your current employer needs...
- To know when your last day is so that they can make your final pay calculation
- An up to date address so that they can send you your final payslip and P45
If you're receiving out of work benefits, you'll have to...
- Contact Job Centre Plus as soon as you know the start date of your new job
- Check if there are any benefits that you can still receive while you're in work
Task 2: Help Sophie
Meet Sophie. You can find out more about Sophie by reading the case study provided below. For this task, read the case study and try and think of problems Sophie might have, and how she could solve them. Think about things like travel, clothing, food and childcare.
Task 3: Understanding your payslip
Every company's payslip is a little bit different, but here's an example of what yours might look like:
On the payslip, try and find...
- Gross pay - this is the total amount of pay you receive before deductions
- Net pay - this is the amount you actually take home, after things like tax and National Insurance have been taken out of your gross pay
- Deductions - this refers to things that are taken out of your pay, like tax and National Insurance
- Tax code - this is the code used to check you're paying the right amount of tax
Task 4: Check your tax code
The example tax code in the payslip above isn’t current. Check your own tax code using the link below.
You may have used the Natwest Salary Calculator if you've completed the 'Budgeting' section, but if you haven't, it's a great tool that can help you to work out what will be taken out of your pay in tax and National Insurance, and what you'll have left afterwards.
You can use the HM Revenue and Customs (HMRC) tax checker to check if you're paying the right amount of income tax - if you're paying too much, you might be able to claim a refund.
If you're self employed, you'll need to use a different tool. This 'self-employed ready reckoner' will help you to budget for your self assessment tax bill for the next tax year.
If all this is a bit confusing, you can find out more information about tax codes and how they're used from the GOV.UK website
Nationwide have some really handy advice about starting work and understanding your pay and payslips
Session Plan For Tutors
If you're a tutor, you might find it useful to use the session plan below to support this topic.